Property prices in Sydney and Melbourne are on the rebound, according to a new report from Deloitte.

Deloitte’s Business Outlook report revealed that average property prices in Sydney have risen by about $3,000 per week in September. Meanwhile, prices in Melbourne have experienced a bounce of around $2,500 a week last month.

While rising property prices may strengthen the housing market in the short-term, the report warned that prices may impact housing affordability in the long run.

“The rebound in Sydney’s housing prices is welcome, but it’s also bad news,” the report said. “It will help NSW by boosting retail (soon) and housing construction (in a little while). But down the track the return towards diabolical rates of housing affordability will bite into NSW’s economic and population growth.”

The report also said rebounding property prices are just “a temporary fix for a nation that is in need of structural reforms” and warned that the country does not need a renewed housing bubble.